Merchandising Operations and the Accounting Cycle - Pearson

Summary Problem
for Your Review
The following trial balance pertains to Jan King Distributing Company Ltd.
JAN KING DISTRIBUTING COMPANY LTD.
Trial Balance
December 31, 2003
Cash.................................................................................................... $ 5,670
Accounts receivable ......................................................................... 37,100
Inventory ........................................................................................... 60,500
Supplies.............................................................................................. 3,930
Prepaid rent....................................................................................... 6,000
Furniture ........................................................................................... 26,500
Accumulated amortization—furniture ......................................... $ 21,200
Accounts payable ............................................................................. 46,340
Salary payable...................................................................................
Interest payable.................................................................................
Unearned sales revenue .................................................................. 3,500
Note payable, long-term.................................................................. 35,000
Common stock .................................................................................. 10,000
Retained earnings............................................................................. 13,680
Dividends .......................................................................................... 48,000
Sales revenue..................................................................................... 346,700
Sales discounts.................................................................................. 10,300
Sales returns and allowances.......................................................... 8,200
Purchases ........................................................................................... 175,900
Purchase discounts........................................................................... 6,000
Purchase returns and allowances................................................... 7,430
Freight in............................................................................................ 9,300
Amortization expense—furniture..................................................
Interest expense ................................................................................ 2,900
Rent expense ..................................................................................... 7,000
Salary expense................................................................................... 82,750
Supplies expense ..............................................................................
Utilities expense................................................................................ 5,800
Total .................................................................................................... $489,850 $489,850
Additional data at December 31, 2003:
a. Supplies used during the year, $2,580.
b. Prepaid rent remaining in force, $1,000.
c. Unearned sales revenue still not earned, $2,400. The company expects to earn
this amount during the next few months.
d. Amortization. The furniture’s estimated useful life is ten years, and it is expected
to have no value when it is retired from service.
e. Accrued salaries, $1,300.
f. Accrued interest expense, $600.
g. Inventory on hand based on an inventory count, $65,800.
Required
1. Enter the trial balance on a work sheet and complete the work sheet.
Chapter Five Merchandising Operations and the Accounting Cycle 289